From crypto Picassos to frozen anthrax

Swiss Re's 10th edition of SONAR scans the horizon for emerging risks

Swiss Re Ltd / Key word(s): Research Update From crypto Picassos to frozen anthrax: Swiss Re's 10th edition of SONAR scans the horizon for emerging risks 16.06.2022 / 10:00 10th anniversary SONAR report covers 14 emerging risk topics across technological, economic, social and environmental areas Trends in crypto assets are revolutionising the financial landscape, leading to new challenges for insurers Thawing permafrost and the struggle to feed a growing world population while cutting agricultural carbon emissions are just two challenges emerging from climate change Zurich, 16 June 2022 – We live in a world where billionaires can take day trips into the stratosphere, crypto assets are challenging established financial norms and climate change is changing the very substance of our physical environment. New risks are arising while the global community deals with known challenges such as the pandemic, war in Ukraine, economic turbulence and failing trust in established social institutions. Swiss Re's SONAR report, now celebrating its 10th anniversary, scans the horizon for emerging risks for the insurance industry. Patrick Raaflaub, Group Chief Risk Officer at Swiss Re, says: "A global pandemic, geopolitical conflicts, surging inflation and an unstoppable climate crisis – these are just some of the many risks that SONAR has examined over the past decade that have ultimately materialised. However, researching new risks is not about forecasting. It is about raising awareness of risks that may impact society and preparing ourselves accordingly." Crypto assets and quantum computing create new risks within the global financial system In the current highly technology-dependent financial system, cryptocurrencies such as Bitcoin and Ether have established themselves as potential challengers to conventional currencies. Alongside these new forms of currency, further crypto assets have emerged. Tokens, for example, allow people to buy digital representations of real assets such as art works or real estate. They can be traded and grant their owner access to assets, products or services. Nowadays, an art lover can buy a fraction of a Picasso. The fluid ownership, taxation, regulatory issues and other risks related to the new asset classes present insurers with fresh challenges. For instance, are certain crypto assets implicitly covered by existing property or cyber policies?